I am rarely one for conspiracy theories or donning tinfoil hats but a word of warning, a lot of this post is conjecture. With that disclaimer out of the way, I would like to discuss a trend that I have noticed with the paid side of Google AdWords. I wrote recently about Google flushing out affiliates that use AdWords. A lot of people didn’t agree with me yet Google published an update just days afterward to it’s “website types to avoid” document about the exact topic. A lot of commenters made the very valid point that Google owns and operates it’s very own affiliate network.

The biggest revelation that was drawn from this and the subsequent thread over on WebmasterWorld was that Google was flushing out even the “highest quality” affiliates. They were even flushing out direct linking affiliates that were advertising with the parent merchants consent. I wont go into the rights and wrongs of all this, it’s been done to death on the WMW thread already and I do not want to discuss the whole Google Vs Affiliates topic again either. What I do want to point out is what happened next.

On Wednesday, November 11th, the Inside AdWords blog announced Product Listing Ads. Product listing ads are image ads that appear along with the “normal” sponsored listings on a Google search result page except they have images, merchant name and prices associated with the ad.

Pay only for results: Product Listing Ads are charged on a cost-per-action (CPA) basis, which means that you only pay when a user clicks on your ad and completes a purchase on your site. Because Product Listing Ads is charged on a CPA basis, it offers a risk-free way for you to reach a larger audience on Google.com.

While this is still in very limited beta it’s quite interesting. I was wondering how Google would go about charging merchants the CPA. I’m not sure how long this has been a feature in Google Merchant Center, but you can now link your AdWords account to your merchant center account.

You can now specify your AdWords account information in your Google Merchant Center account. By doing this, you can surface your product information in your AdWords ads. AdWords campaigns that are linked to Google Merchant Center accounts will receive the benefit of richer, more specific product information in their creatives; including images and prices.

So now Google is allowing merchants to link their product feeds to AdWords and set a price they want to pay for each sale? Isn’t that what a PPC affiliate does/Used to do? Only this time, Google being the owner of the search engine can offer what no other affiliate can, images and branding directly in the search results.

Could it be that Google flushed out all the affiliates to make room for the merchants that it is promoting on a CPA basis? What if Google were to allow it’s affiliate network merchants opt in to product listing ads? All their feeds, data, images and prices are already uploaded to the network. Couldn’t/Shouldn’t Google start displaying product listing ads in the search results for it’s own merchants and getting a nice juicy CPA for it? Doesn’t this make sense? Google has all the data it needs to display the most profitable product ads too. Affiliate marketing is a multi billion dollar industry. Why wouldn’t they get on board? Especially if it compliments their existing search results. It appears that others have come to the same conclusion. Google have since announced more AdWords bans and in typical Google fashion, refuse to communicate clearly.

Don’t get me wrong, I think this is great for merchants and I am a firm believer that Google can and should do what they want with their own search engine. I am also not sounding the death knell of affiliate PPC marketing. I do however believe that PPC affiliates are going to be up against a pretty powerful 800 Lb Gorilla in the very near future.

But nothing pisses me off more than seeing all the talk about how Google has destroyed your business. Google has NOT destroyed your business. If your business cannot survive without Google, then YOU have destroyed your business..

…Google is not responsible for the success or failure of your business. YOU are.

I was wondering why Google was flushing affiliates out of the AdWords system and not so much the organic results. This is, in my opinion, a possible reason why. Google is making room for itself. Time to focus a little more on paid search? What do you think?

Totally agree with you on this post (as my last ranting blog post will suggest). The first page of Google will become a pay per inclusion or advertisement for their own properties. If Google can increase their revenue by cutting out the middle man, then why not. The SERP’s are becoming so blended that a top spot on organic no longer gets you above the fold in some markets. As I said, for me it’s about traffic optimisation going forward. Making sure you squeeze every last conversion out of the traffic you generate, which is where analytics + GWO come into it. It will be interesting to see how Bing progresses. Google is no longer what it used to be (which I am not complaining about), Bing is a lot cleaner, keeping additional information in the side panels.

Your post is spot on. But it also goes to show that if you’re not satisfied with the volume of free/organic traffic, then you MUST start learning how to play efficiently in the paid game.

Good point about Bing too. I think (but am probably wrong as Google have obviously tested this) that many users are uncomfortable with the complicated nature of some of Google’s latest SERPs. Bing has kept things simple, something Google was very good at. I’m sure a lot of folks who are used to, and simply prefer a list of ten simple links will begin to use Bing a little more.

Finally, your right, optimizing traffic for conversions should now be a priority for most webmasters as the results of the effort are “source independent” (to a large extent). Where as specific SEO tactics are not. In a lot of cases, they work with one SE and not another.

I have not been here for a while it seems as it is the first time I have seen the new design – it looks great.

Even though most of my sites make their money from ads, I think the best way to be using the web just now is to sell own products and I have been looking for tie ups in that area.

G were always heading in this direction, they tried it a year or so back inside adsense and that didn’t work for too long. It will be interesting to see how this goes.

I don’t believe Google have the man power to completely domiate – I have seen too many adwords accounts set up by their internal experts that were not very good.

As usual I think our space is alway interesting, with MS wooing news to them only, (great for me I think, getrid of all those strong sites), and Google playing with MS with its apps. The thing to remember is that both of them need content and publishers, if publishers stop making money what happens then – time will tell as usual.

Dan Says: December 1st, 2009 at 4:52 am

Great post, David. Talk about a “Google Slap”, this could be the knockout punch for PPC-CPA marketers; even for affiliate websites that used to rank high naturally.

If Google wants to play the affiliate game and try to monopolize it, it will see reduced PPC revenues from AdWords affiliate marketers. The first shoe fell when it discouraged affiliate links in landing pages of PPC campaigns. That must have hit them in the pocketbook, but they must have done a cost-benefit analysis and decided that it was worth the lost AdWords revenue to try this venture. At this point, they can afford to experiment like this. Let’s see how this pans out.

As much as it may seem so, Google is NOT a monopoly. Anyone is free to set up their own search engine. They are however in my opinion the best search engine which is proving to be very difficult to beat.

Dumping affiliates and losing some babies in the bathwater is something they were willing and able to do.

I would like to see google offer a CPM advertising program to the public, I know they recently bought Doubleclick but apparently they bought it and now aren’t taking new publishers. Adsense just doesn’t do it for me anymore, please correct me if I’m wrong!

I can understand why but what I think this will come down to after awhile is a loss of trust.

Example….Google banks big time off of affiliates for years. Some guys spend a few 100k per day (or spent). Suddenly they have to compete directly with Google.

Google promoted Firefox against IE for browser. Suddenly Firefox has to compete with chrome.

Google offers Android as an alternative phone OS. Phone makers now have to compete with the upcoming Google phone.

I could go on but, to me, the pattern is already pretty obvious. Google gets way more latitude on this than MS got because they are smarter about how they work things…I believe dangerously so. Almost looks as if we’ve built a monster.

Great post. It seems to me that Google are moving further and further away from their original aims of “do no evil” and accurate unbiased serps. If they continue in this vain there will be a backlash and searchers will take their custom elsewhere.

Google is once again taking over an industry segment… their methods are questionable to say the least and their power and influence unmatched. It is not fair to say that bad business management alone leads to Google killing businesses… no one else has such positioning or a war chest (not only money but developers).

Whilst I completely understand their aims of making people find the things they are looking for as effectively as possible, even if its paid for, it concerns me that this is slowly being degraded by a mission to own EVERYTHING digital, including sales.

Even the role of a PPC campaign manager will one day be obsolete!

Microsoft is beginning to look like a saint compared to this gruesome machine!

Just found this post… and I have to agree sadly, that Google is becoming too powerful. The number of people growing disgruntled with Google is rising. I just wish someone would build a proper search engine! I hate to admit that I love Google so much… *sigh* the parallels with MS that Adam pointed out are just scary. :(

That’s interesting, I guess my only concern is if organic search listings become obsolete, not that you’re suggesting that, but if pay per click becomes the sole contender then a lot of businesses would be struggling, including businesses that provide organic SEO services.